Kmart Will Still Change Your Oil

A U.S. bankruptcy court in Illinois has ordered Penske Auto Centers (PAC) to continue operating its automobile service facilities in 563 Kmart stores across the country. PAC, which is 36 percent owned by Kmart Corp., had told the Troy, Mich.-based bankrupt retailer that it intended to immediately shut down the operations of the auto centers as of the start of business on Saturday, April 6, 2002.

In a press release following the court's order, Kmart said it “regrets the precipitous action taken earlier today by Penske and is pleased that the court has issued a temporary restraining order to keep the centers open.” The retailer said it had been in discussions with Penske for several weeks regarding a mutually acceptable plan for the future of the auto centers that would protect the interests of the centers'customers. The retailer noted that all of its stores across the nation, including those with auto centers, “are open and conducting business as usual.”

However, PAC chairman Richard Peters stated that on March 27, Kmart officials said they had determined through their research that the auto centers provided no value to Kmart's core business and that it was “unwilling to provide any support to PAC and agreed that the best course of action was to close PAC.” During that period, Peters noted, Penske Corp. had “provided over $40 million to support the viability of PAC.”

Penske Corp., founded by former race car driver Roger Penske, purchased the centers from Kmart in 1995. Peters said PAC will appear before the court in Chicago on April 8 to protect its interests.